The Benefits of Adding a Cover Letter to Your Home Offer

Published on June 1, 2021 under Tips

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When you add a cover letter from you to the seller, you make your offer stand out. You help the seller focus on your offer's details, so they understand why they should accept it and not one of the others.

Many buyers and real estate agents make simple assumptions about sellers. For example, they assume that sellers always:

  • Accept the highest offer price.
  • Want to close ASAP.
  • Have no interest in the buyers as people.
  • Forget about their home as soon as they get their check.

Those things are true in some cases, but not all. It can pay healthy dividends to go the few extra yards to persuade the seller to give your offer closer attention, to put it at the top of the pile, and if they are going to counter, to give you first refusal.

In today's strong residential real estate market, you want your offer to stand out. You also want the seller to understand the reasoning behind your offer. A cover letter achieves both.

Many listing agents are good at explaining offers to sellers, but many are not. Many realtors are inexperienced and have not been trained on how to present and explain offers to sellers. They may not know how to discuss the reasoning behind an offer with the buyer's agent before presenting it to help the seller make a balanced decision.

So, for these additional reasons, your cover letter may achieve more than you, your realtor, or the listing agent ever expected.

The Seller's Point of View

Everyone is different, but those differences fall into four main profiles in the psychology of selling. If you think about how the seller may see things, your cover letter will stand out even more. Those four profiles fall into only two groups, so it is easy to write a cover letter which does more than simply explain the facts of your offer.

You want the seller to understand deeply why you want their house. And that is quite easy to do. Let us break down the psychology of selling into its two groups:

Group 1 sees the facts of the matter before the human side. So bullet-point the details of your offer to make it easy for them to get the whole picture. This group will also have two primary responses to your bullet pointed list.

They will say to themselves:

  • "This is clear, the buyer respects me. I value the effort they have put in." or
  • "Good, detailed, simple, everything is included, so I can make a firm decision."

Group 2 is more people-oriented than fact-oriented, so as well as bullet-pointing the details for Group 1, include the human reasons behind your offer. For example:

  • How much you love the most important features inside the home that make you want to live there. Commute times, schools your children will attend, the social amenities you and your family will use, how you will continue to take care of the plants in their yard, etc.

They will say to themselves:

  • "I like you as a person, your family will love our home as much as we do."
  • "I feel I can work with you."

Always Remember

The first group will be less interested in the personal reasons for your offer; they focus on facts, respect and trust, and will not really care about the 'softer' topics. The other group will find your bullet list helpful, and will be impressed that you see things the way they do.

In both cases, you make your offer stand out, and make it easy for the seller to both understand your offer and encourage them either to accept it or to put you at the top of the list if they make a counter-offer.

What Else Should You Include in Your Cover Letter?

Basically, anything that will help the seller say "Yes." The more you know about the seller the better, so ask your agent to find out what they can about the seller's motivation or what kind of people they are. For example:

  • Does the seller have to close quickly? If so, make sure your letter says you can pay cash or have a fully-approved mortgage in place, and you can close in X days (Confirm potential closing dates with your lender and with the title company).
  • Does the seller need more time to find the home they want to buy? Or, if they are buying new construction, has their builder got a specific timeline the seller must work to? If so, (and if you can do it) emphasize that you will let the seller choose the closing date. Taking that kind of pressure away from the seller may be worth more than a slightly higher offer price from someone else. Group 1 sellers will see this as being respected and a way to save them money by not having to store their furniture or take a short-term rental. Group 2 will feel relieved and know they can work with you.
  • Has a previous contract fallen through? Was a previous buyer only partially-qualified and not fully pre-approved for a mortgage, and then had to pull out? Emphasizing your fully-approved status in your letter may be enough to swing the deal in your favor.

The Takeaway

Adding a cover letter puts you ahead of the competition. You get your offer at the top of the pile in this competitive market. When you write your letter which includes the facts and the feelings, you cover all the bases and make it easy for the seller to both understand every detail about you and why they should accept.

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